Valvoline's Q2 Results Highlight Sales Increase, Stock Surges Higher

Valvoline Inc VVV reported second-quarter FY23 sales growth of 16% year-on-year to $344.50 million, marginally beating the analyst consensus of $344.36 million.
The automotive services provider registered an adjusted EPS of $0.23, missing the analyst consensus of $0.28.
System-wide SSS increased 13.5% Y/Y.
Gross profit climbed 18.1% to $126.7 million, with a profit margin of 36.8%.
Operating income for the quarter jumped 53% to $61.2 million, with a margin of 17.8%.
At quarter end, Cash and cash equivalents balance was $2.3 billion, with $8.3 million of interest income earned on net proceeds from the sale of Global Products.
"As we approach the summer travel season, our stores are well staffed and prepared to continue driving growth in the back half of the year," said CEO Sam Mitchell.
Outlook: Valvoline reiterated its FY23 outlook. Valvoline sees FY23 System-wide SSS growth of 8% - 12%.
The company expects FY23 revenue of $1.4 billion - $1.5 billion (consensus at $1.43 billion) and adjusted EBITDA of $370 million - $390 million.
Price Action: VVV shares are trading higher by 12.5% at $38.57 on the last check Wednesday.